Making solar+storage economics work

As excitement around the storage industry grows, so does Intersolar NA’s conference program. I enjoyed attending a session called “Bridging the storage gap: Making energy storage cost-effective for customers,” in which presenters discussed topics such as storage policies and opportunities.

Here are some highlights from three presentations I heard.

Economic indicators of the emerging solar+storage market: Joyce McLaren, research analyst at NRELMcLaren discussed an interesting study NREL did on what it takes for solar+storage to be economical. The team looked at locations across the country and different building types, such as fast food restaurants, hospitals and more.

Findings concluded that technology costs and rate structure impacted economics most. Time-of-use and demand charges really drive the economics of solar+storage. In fact, it’s estimated that about five million customers are eligible for demand charges of $15 or more. In some cases, switching to a different rate after installing solar+storage yielded the best economics.

Also, the study concluded that as technology costs decline (such as battery prices), solar+storage becomes more economical across more locations and building types. Payback periods also decline. The study found payback periods between five and 12 years. Declining technology costs also cause the optimal system size of solar+storage projects to increase.

McLaren said that she was surprised to find that load factor (variability) actually had little impact on potential savings with solar+storage. The ITC step-down, net-energy metering and electricity price increases also had minimal impact on savings.

This fall, NREL will offer the tool they used on this study as a web version free to the public. Visit REopt.nrel.gov to learn more.

Opportunities to offer savings to commercial storage customers: Sean Kiernan, vice president and general manager at Green Charge“Providers without energy storage capabilities will be vulnerable in the coming years,” Kiernan said.

He sees many opportunities to offer savings to commercial customers with storage.

The ability for storage providers to guarantee performance will add value to existing contract structures, such as PPAs. “Providing bankability on what systems are going to do five or ten years from now, and having that performance guarantee is important to allowing solar and storage to proliferate,” Kiernan said.

Conditions for energy storage to be economically viable: Philip Fischer, sales director, NEC Energy SolutionsIt was 10 years before economics made sense for NEC Energy Solutions to install solar+storage in its home state of Massachusetts.

Hs presentation at Intersolar highlighted the spread of storage initiatives outside of California. Through its HB 1593, Hawaii is allowing zero-net export for its energy storage rebate program. Massachusetts has developed an energy storage initiative as well. After Hurricane Sandy, Connecticut realized the fragility of its grid. Solar+storage helps command and control centers and emergency services stay powered. Also, New York has also been devoting millions to demo projects others around the country can learn from. PJM (which services Pennsylvania, New Jersey and Maryland) uses storage as a grid asset. In, looking for how energy storage can bring value to the grid, Maryland and New Jersey are looking for soft and hard costs reduction. Finally, Nevada is looking at incentives and energy storage targets after being adversarial to new technologies. With only 2.2% of the world’s energy stored, there’s great potential for market growth and I look forward to covering its progress.